Rob sells stock with a cost of $3,000 to his daughter for $2,200,which is its fair market value.Later the daughter sells the stock for $3,200 to an unrelated party.Which of the following describes the tax treatment to Rob and Daughter?

Question

Quizplus · Accepted Answer

Rob will have a capital loss of $800 ($2,200 - $3,000) but cannot deduct it because the sale was to a related party (his daughter). 
Daughter will have a capital gain of $1,000 ($3,200 - $2,200) which will be reported on her tax return.

Rob Sells Stock with a Cost of $3,000 to His